On the Nature and Security of Expiring Digital Cash

Abstract

Digital cash is coming, and it could be programmed to behave in novel ways. In 2020, the People’s Bank of China ran an experiment during which they distributed free digital cash to 50,000 citizens. But it had a twist: they programmed that digital cash to expire if not spent within a few days. This fascinating and somewhat paradoxical experiment opens many questions. If the cash expires, why would anyone accept it as payment? If it is intended to expire, can the recipient find ways to make it not expire? We explore a variety of possible attacks on expiring cash, countermeasures to those attacks, and alternative implementations, one based on CBDC and another on a public blockchain. We also discuss the more philosophical question of whether expiring cash is still cash: we argue it cannot be.